SOURCES OF OBLIGATIONS

Amadora vs. CA 160 SCRA 315

OVERVIEW:
Like any prospective graduate, Alfredo Amadora was looking forward to the commencement exercises where he would ascend the stage and in the
presence of his relatives and friends receive his high school diploma. These ceremonies were scheduled on April 16, 1972. As it turned out, though,
fate would intervene and deny him that awaited experience. On April 13, 1972, while they were in the auditorium of their school, the Colegio de San
Jose-Recoletos, a classmate, Pablito Damon, fired a gun that mortally hit Alfredo, ending all his expectations and his life as well. The victim was
only seventeen years old.

FACTS:
Alfredo Amadora, while in the auditorium of the school, was mortally hit by a gun by Pablito Daffon resulting to the former’s death. Daffon was
convicted of homicide through reckless imprudence. The victim’s parents, herein petitioners, filed a civil action for damages against Colegio de San
Jose-Recoletos, its rectors, high school principal, dean of boys, the physics teacher together with Daffon and 2 other students. Complaints against
the students were dropped. Respondent Court absolved the defendants completely and reversed CFI Cebu’s decision for the following reasons:
1. Since the school was an academic institution of learning and not a school of arts and trades
2. That students were not in the custody of the school since the semester has already ended
3. There was no clear identification of the fatal gun, and
4. In any event, defendants exercised the necessary diligence through enforcement of the school regulations in maintaining discipline. Petitioners
on othe other hand claimed their son was under school custody because he went to school to comply with a requirement for graduation (submission
of Physics reports).

ISSUE:
WON Collegio de San Jose-Recoletos should be held liable.

RULING:
The Court has come to the conclusion that the provision in question (Art. 2180) should apply to all schools, academic as well as non-academic.

Following the canon of reddendo singular singuli, where the school is academic, responsibility for the tort committed by the student will attach to the
teacher in charge of such student. This is the general rule. Reason: Old academic schools, the heads just supervise the teachers who are the ones
directly involved with the students.

Where the school is for arts and trades, it is the head and only he who shall be held liable as an exception to the general rule. Reason: Old schools
of arts and trades saw the masters or heads of the school personally and directly instructed the apprentices.

Therefore, the heads are not liable. The teacher-in-charge is not also liable because there’s no showing that he was negligent in enforcing
discipline against the accused or that he waived observance of the rules and regulations of the school, or condoned their non-observance. Also, the
fact that he wasn’t present can’t be considered against him because he wasn’t required to report on that day. Classes had already ceased.
SUMMARY/RELEVANT PROVISION:
Under Article 2180 of the Civil Code only the teacher or the head of the school of arts and trades is made responsible for the damage caused by the
student or apprentice. Thus, the school, its rector, the high school principal, and the dean cannot be held liable.

PADCOM vs. Ortigas (GR No. 146807, 9 May 2002, 382 SCRA 222)

OVERVIEW:
This is a case involving obligation arising from contract (membership dues which are considered incidental costs of the contract).

FACTS:
Petitioner Padcom Condominium Corporation (PADCOM) owns and manages the Padilla Office Condominium Building (PADCOM BUILDING). The
land on which the building stands was originally acquired from the Ortigas & Company, Limited Partnership, by Tierra Development Corporation
(TDC) under a Deed of Sale with a condition that the transferee and its successor-in-interest must become members of an association for realty
owners and long-term lessees in the area later known as the Ortigas Center. Subsequently, the said lot, together with the improvements thereon,
was conveyed by TDC in favor of PADCOM in a Deed of Transfer.

Thereafter, respondent Ortigas Center Association, Inc. (ASSOCIATION) was organized to advance the interests and promote the general welfare
of the real estate owners and long-term lessees of the lots in the Ortigas Center and sought the collection of membership dues from PADCOM. In
view of PADCOM'S failure and refusal to pay its arrears in monthly dues, the Association filed a complaint for collection of sum of money before the
trial court, but the same was dismissed. On appeal, the Court of Appeals reversed and set aside the trial court's dismissal.

WHEREFORE, the appealed decision dated September 1, 1997 is REVERSED and SET ASIDE and, in lieu thereof, a new one is entered ordering
the appellee (PADCOM) to pay the appellant (the Association) the following:
1) P639,961.47 as and for membership dues in arrears inclusive of earned interests and penalties; and
2) P25,000.00 as and for attorney's fees.
Costs against the appellees.

Hence, this petition.

ISSUE:
Whether or not PADCOM is unjustly enriched by the improvements made by the Association, thus requiring the former to pay dues to the latter.

RULING:
Yes. The Supreme Court held that as resident and lot owner in the Ortigas area, PADCOM was definitely benefited by the Association's acts and
activities to promote the interests and welfare of those who acquire property therein or benefit from the acts or activities of the Association.

Generally, it may be said that a quasi-contract is based on the presumed will or intent of the obligor dictated by equity and by the principles of
absolute justice. Examples of these principles are: (1) it is presumed that a person agrees to that which will benefit him; (2) nobody wants to enrich
himself unjustly at the expense of another; or (3) one must do unto others what he would want others to do unto him under the same circumstances.
Finally, PADCOM's argument that the collection of monthly dues has no basis since there was no board resolution defining how much fees are to
be imposed deserves scant consideration. Suffice it is to say that PADCOM never protested upon receipt of the earlier demands for payment of
membership dues. In fact, by proposing a scheme to pay its obligation, PADCOM cannot belatedly question the Association's authority to assess
and collect the fees in accordance with the total land area owned or occupied by the members, which finds support in a resolution dated 6 November
1982 of the Association's incorporating directors and Section 2 of its By-laws.

RELEVANT PROVISIONS:
Having ruled that PADCOM is a member of the Association, it is obligated to pay its dues incidental thereto. Article 1159 of the Civil Code mandates:
Art. 1159. Obligations arising from contracts have the force of law between the contracting parties and should be complied with in good faith.

Assuming in gratis argumenti that PADCOM is not a member of the Association, it cannot evade payment without violating the equitable principles
underlying quasi-contracts. Article 2142 of the Civil Code provides:
Art. 2142. Certain lawful, voluntary and unilateral acts give rise to the juridical relation of quasi-contract to the end that no one shall be unjustly
enriched or benefited at the expense of another.

Metrobank vs. Absolute Management (GR No. 170498, 9 Jan. 2013, 688 SCRA 225)

OVERVIEW:
Metrobank deposited the AMC checks to Ayala Lumber and Hardware’s account; because of Chua’s control over AMC’s operations, Metrobank
assumed that the checks payable to AMC could be deposited to Ayala Lumber and Hardware’s account. Ayala Lumber and Hardware had no right
to demand and receive the checks that were deposited to its account; despite Chua’s control over AMC and Ayala Lumber and Hardware, the two
entities are distinct, and checks exclusively and expressly payable to one cannot be
deposited in the account of the other.

FACTS:
1. On October 5, 2000, Sherwood Holdings Corporation, Inc. (SHCI) filed a complaint for sum of money against Absolute Management
Corporation (AMC).
2. SHCI alleged in its complaint that it made advance payments to AMC for the purchase of 27,000 pieces of plywood and 16,500 plyboards
in the sum of ₱12,277,500.00, covered by Metrobank Check Nos. 1407668502, 140768507, 140768530, 140768531, 140768532,
140768533 and 140768534. These checks were all crossed, and were all made payable to AMC. They were given to Chua, AMC’s General
Manager, in 1998.
3. Chua died in 1999, and a special proceeding for the settlement of his estate was commenced before the RTC of Pasay City. This proceeding
was pending at the time AMC filed its answer with counterclaims and third-party complaint.
4. SHCI made demands on AMC, after Chua’s death, for allegedly undelivered items worth ₱8,331,700.00. According to AMC, these
transactions could not be found in its records. Upon investigation, AMC discovered that in 1998, Chua received from SHCI 18 Metrobank
checks worth ₱31,807,500.00. These were all payable to AMC and were crossed or "for payee’s account only."
 5. In its answer with counterclaims and third-party complaint, AMC averred that it had no knowledge of Chua’s transactions with SHCI and it
did not receive any money from the latter. AMC also asked the RTC to hold Metrobank liable for the subject checks in case it is adjudged
liable to SHCI.
6. Metrobank filed a motion for bill of particulars, seeking to clarify certain ambiguous statements in AMC’s answer. The RTC granted the
motion but AMC failed to submit the required bill of particulars. Hence, Metrobank filed a motion to strike out the third-party complaint.
7. In the meantime, Metrobank filed a motion to dismiss against AMC on the ground that the latter engaged in prohibited forum shopping.
According to Metrobank, AMC’s claim against it is the same claim that it raised against Chua’s estate in Special Proceedings No. 99-0023
before the RTC of Pasay City, Branch 112. The RTC subsequently denied this motion.
8. The RTC of Quezon City opted to defer consideration of Metrobank’s motion to strike out third-party complaint and it instead granted AMC’s
motion for leave to serve written interrogatories on the third-party defendant. While Metrobank filed its answer to the written interrogatories,
AMC was again directed by the RTC, in an order dated August 13, 2003, to submit its bill of particulars. Instead, AMC filed a motion for
reconsideration which was denied in an order dated October 28, 2003. AMC still did not file its bill of particulars. The RTC, on the other
hand, did not act on Metrobank’s motion to strike out AMC’s third-party complaint.
9. In its answer dated December 1, 2003, Metrobank admitted that it deposited the checks in question to the account of Ayala Lumber and
Hardware, a sole proprietorship Chua owned and managed. The deposit was allegedly done with the knowledge and consent of AMC.
According to
10. Metrobank, Chua then gave the assurance that the arrangement for the handling of the checks carried AMC’s consent. Chua also submitted
documents showing his position and interest in AMC. These documents, as well as AMC’s admission in its answer that it allowed Chua to
manage AMC with a relative free hand, show that it knew of Chua’s arrangement with Metrobank. Further, Chua’s records show that the
proceeds of the checks were remitted to AMC which cannot therefore now claim that it did not receive these proceeds.
11. Metrobank also raised the defense of estoppel. According to Metrobank, AMC had knowledge of its arrangements with Chua for several
years. Despite this arrangement, AMC did not object to nor did it call the attention of Metrobank about Chua’s alleged lack of authority to
deposit the checks in Ayala Lumber and Hardware’s account. At this point, AMC is already estopped from questioning Chua’s authority to
deposit these checks in Ayala Lumber and Hardware’s account.
12. Lastly, Metrobank asserted that AMC gave Chua unbridled control in managing AMC’s affairs. This measure of control amounted to gross
negligence that was the proximate cause of the loss that AMC must now bear.
13. Subsequently, Metrobank filed a motion for leave to admit fourth-party complaint against Chua’s estate. It alleged that Chua’s estate should
reimburse Metrobank in case it would be held liable in the third-party complaint filed against it by AMC.
14. In its fourth-party complaint, Metrobank claims that Chua’s estate should reimburse it if it becomes liable on the checks that it deposited to
Ayala Lumber and Hardware’s account.

ISSUE:
Whether or not Ayala Lumber must return the amount of said checks to Metrobank.

RULING:
Metrobank acted in a manner akin to a mistake when it deposited the AMC checks to Ayala Lumber and Hardware’s account because it assumed
that the checks payable to AMC could be deposited to Ayala Lumber and Hardware’s account. This disjunct created an obligation on the part of
Ayala Lumber and Hardware, through its sole proprietor, Chua, to return the amount of these checks to Metrobank.
This fulfills the requisites of solutio indebiti. Metrobank’s fourth-party complaint falls under the quasi-contracts enunciated in Article 2154 of the
Civil Code. Article 2154 embodies the concept “solutio indebiti” which arises when something is delivered through mistake to a person who has no
right to demand it. It obligates the latter to return what has been received through mistake. Solutio indebiti, as defined in Article 2154 of the Civil
Code, has two indispensable requisites: first, that something has been unduly delivered through mistake; and second, that something was received
when there was no right to demand it.

RELEVANT PROVISIONS:
Art. 1157. Obligations arise from:
(1) Law;
(2) Contracts;
(3) Quasi-contracts;
(4) Acts or omissions punished by law; and
(5) Quasi-delicts. (1089a)

Art. 2154. If something is received when there is no right to demand it, and it was unduly delivered through mistake, the obligation to
return it arises.